British Reporter: Executives Knew Of Phone Hacking

August 16, 2011

David Folkenflik

Carl De Souza

Clive Goodman, a former reporter at the News of the World newspaper in Britain, is a key figure in the current phone hacking scandal. He's shown here in an Aug. 16, 2006 photo in London.

Documents released Tuesday in London by a Parliamentary committee contain charges that illegal phone hacking was a widespread practice and that its occurrence was well known at the highest levels of Rupert Murdoch's now closed tabloid News of the World.

In addition, the documents also challenge testimony from his son, James Murdoch, before a parliamentary committee last month and strongly suggest senior British officials in his family's media empire participated in a cover up.

Taken together, the documents strike at the pillars of the defense for News Corp and the Murdochs. Labor MP Tom Watson, a leading lawmaker involved in the investigation, called the claims "explosive" and "devastating." Key executives and editors are being recalled to testify before the parliamentary committee next month and the younger Murdoch will likely follow.

While the company takes responsibility for the phone hacking and police corruption scandal, executives have maintained they did not know about those illegal actions until recently.

Yet four years ago, in a letter released only Tuesday, former News of the World royals editor Clive Goodman said otherwise. Goodman and a private investigator for the tabloid, Glenn Mulcaire, had pleaded guilty and received jail sentences for hacking into the phones of members of the royal family. Les Hinton, then the top executive at News International, News Corp's British newspaper division, fired Goodman.

The disgraced journalist wrote to a senior human resources official to object, calling his firing "perverse." Goodman wrote that his actions were always carried out with the knowledge and support of colleagues and that "other members of staff were carrying out the same illegal procedures."

Goodman added that the paper's top lawyer, Tom Crone, and its editor in chief, Andrew Coulson, "promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not, and I expect the paper to honor its promise to me."

It is an extraordinary charge, disclosed publicly only Tuesday, weeks since MPs successfully pressured the company to stop footing Goodman's legal bills. Goodman was arrested anew in July and questioned about allegations that he bribed police officers for information, though no criminal charges have been filed to date.

"In that letter, (Goodman) says the reason why he is appealing is because other members of staff were carrying out the same illegal procedures — and he then goes on to say this practice was widely discussed in the daily editorial conference until explicit reference to it was banned by the editor," Whittingdale said. "Now that is a pretty extraordinary claim."

That editor in chief — Andrew Coulson — resigned but became a top aide to Prime Minister David Cameron. He had to resign from that post as well when the scandal flared up earlier this year.

Letters And Memos

A letter from James Murdoch, the head of News Corp's operations in Europe and Asia, which was released concurrently on Tuesday, reveal Goodman was paid roughly $400,000 in severance payments and fees that year.

Hinton cited Goodman's long service and concern for his family in agreeing to that payment, though he told the former reporter he was owed nothing by the company, given his crimes. Hinton resigned as publisher of the Murdoch-owned Wall Street Journal several weeks ago as the scandal was raging. News Corp's British subsidiary also paid the private investigator, Glen Mulcaire, about $400,000 toward his legal fees, according to the company.

Watson, another member of the parliamentary committee, told Sky News the implications were stark.

"If Clive Goodman's letter is accurate ... the whole foundation of the company's defense for the past three years collapses," Watson said. "And it also shows that Andy Coulson's previous evidence was misleading to Parliament."

Coulson and a parade of News Corp officials repeatedly testified that they believed Goodman had been a rogue reporter, acting alone.

Last month, James Murdoch told the parliamentary inquiry he did not know hacking was widespread until last year — even though he had approved a payments by News Corp exceeding a million pounds to settle just such a complaint against News of the World two years earlier, in 2008.

Murdoch also said he hadn't known of a crucial memo which showed other reporters had been involved in phone hacking — the so-called "for Neville" memo.

But the paper's former top lawyer, Tom Crone, told the committee in a statement released Tuesday that he shared that email with Murdoch during the very meeting at which the executive approved the settlement.

Murdoch stood by his denial — saying once again he did not see the "for Neville" email.

Yet his testimony faces further contradictions from other sources.

The Outside Review

James Murdoch also told Parliament the company relied on an outside review by a law firm — Harbottle & Lewis — to conclude and announce the hacking by Goodman and the private investigator had been an isolated case. Several former executives and editors testified a thorough review had turned up no evidence of additional wrongdoing.

As Murdoch told the committee last month, "it's my understanding that that is what Harbottle & Lewis were helping to deal with, and that that opinion did satisfy the company at the time. And we, the company, rested on that opinion for a period of time."

British police now say several thousand people may have been targeted by the tabloid's journalists and private investigators.

James Murdoch's father, News Corp Chairman and CEO Rupert Murdoch, told the Wall Street Journal several weeks ago that the law firm made a "major mistake" in the conclusions of its reviews.

The law firm is now firing back, saying it had received access to emails from only a handful of people and had been narrowly asked whether those emails could be used to prove Goodman's claims.

"The Firm was not being asked to provide some sort of 'good conduct certificate' which News International could show to Parliament, or the police, or anyone else" Harbottle & Lewis LLP wrote in its formal response. "[W]hat the Firm did was only a short and limited exercise, undertaken for the one specific purpose of assisting News International in deciding internally how to handle Mr. Goodman's employment claim."

Conservative MP Louise Mensch, also a member of a Parliamentary committee involved in the inquiry, tells NPR she finds the memo from the law firm more damning than Goodman's original letter.

"It would appear that Harbottle & Lewis rejected attempts by the company to get them to give blanket clearance — a blanket sort of exculpatory note," Mensch said in an interview. "They wouldn't say that there was no reasonable evidence that Mr. Goodman's claims were true. They would only say Mr. Goodman's claims weren't proven. Which is a big difference."

Whittingdale announced that the committee would recall Crone, the tabloid's former top lawyer; former News of the World editor Colin Myler; former News International human resources officer Daniel Cloke and former News International senior lawyer John Chapman. They have been asked to testify on Sept. 6.

Additionally, the committee has asked the tabloid's former editors in chief Andy Coulson and Rebekah Brooks, former managing editor Stuart Kuttner and Les Hinton, the chief executive for News Corp's U.K. newspapers, whether they wish to alter their previous testimony.

News Corp. itself issued a statement Tuesday saying it recognizes the importance of cooperating with the committee and other government agencies looking into the scandal.